Jewelry Makers Prop Up Gold

A triangle formation occurs when the price trades in an increasingly narrow range, forming the shape of a pennant on a chart. The range becomes tighter until resistance or support is broken, at which point a large move up or down is expected.

Palmisano says such a break should come within a couple of trading sessions.

In the gold patch, the Chicago Board Options Exchange Gold Index rallied 1.2%. Component stock Goldcorp(GG Quote) gained 3.6%.

Turning to base metals, copper contracts lost a penny to close at $2.45 a pound on the Comex, with at least one analyst seeing continued softness for the foreseeable future.

"The current prices are still [way] above the marginal costs of production of even the highest cost producer," says Neil Buxton, a managing director at GFMS Metals Consulting in London. "The bottom line is that you won't see a supply response" of cutbacks in output.

Unlike some other analysts, Buxton doubts inventory restocking by China will absorb enough metal to counterbalance supply.

Elsewhere, Citigroup was busy in the aluminum segment, upgrading shares of both Alcan(AL Quote) and Alcoa(AA Quote) to buy from hold. That helped boost the shares 2.4% and 1.5%, respectively.

As for ferrous metals, JP Morgan dinged AK Steel(AKS Quote) down to a neutral rating from overweight, sending the shares down 1.5%.